Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Financial Accounting Expert

Problem: Alex Cook, owner of the Yum Yum Pretzel Company, bought a pretzel twister, nicknamed the "Alpha," 5 years ago for $300,000. The Alpha manufactures 400,000 pretzels per year, and the pretzels currently sell for 40 cents each (suppose that the variable cost to produce a pretzel is zero). The Alpha is anticipated to last forever, with the annual maintenance expense of $30,000. Mr. Cook is considering purchasing a new machine, the "Beta." The Beta costs $500,000 and will also last forever, with a yearly maintenance expense of $20,000. The Beta can manufacture 600,000 pretzels per year, which would as well sell for 40 cents each. Mr. Cook figures that he could sell the Alpha today for $40,000. Pretzel twisters are depreciated on a straight-line basis to a zero salvage value over 5 years. The firm pays taxes at a rate of 40%, and employs a discount rate of 10% for project analysis.

i) Create a timeline or table of the relevant cash flows, and evaluate the NPV of Mr. Cook's replacement decision.

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M93705

Have any Question? 


Related Questions in Financial Accounting

Intermediate accounting assignmentpart 11 the receipt of

Intermediate Accounting Assignment Part 1 1) The receipt of interest on loans would be reported on a statement of cash flows under the: A) Financing B) operating activities C) investing activities D) Interest received on ...

Infrastructure of homeland security hmls 4081 i choose the

Infrastructure of Homeland Security (HMLS 408) 1. I choose The Department Of Energy 2. Parts I and II are to be submitted as one submission, in the form of a continuous document. Make sure to delineate/identify part I an ...

Territory account management calculating sales compensation

Territory Account Management Calculating Sales Compensation In problems 1 – 4, compute both the commission and the total pay based on the information given. 1. Salary, $3,000; commission rate, 6%, total sales, $58,000; r ...

Tootsie roll industries2015 annual report analysis

Tootsie Roll Industries 2015 Annual Report Analysis Questions Net earnings refers to net income temporary investments are current assets Q1 Where are its corporate headquarters? on What date was tootsie roll's last annua ...

Explain and analyze the external factors on or of

Explain and analyze the external factors on or of international business (e.g., political, legal, economics, culture, etc.) and how these may impact business.

Assignmentat this point you have examined three years of

Assignment At this point you have examined three years of financial statements for your firm and produced a proforma statement. You have also determined their sustainable growth rate as well. You have also learned about ...

Financial accounting assessment one two and threecomplete

Financial Accounting Assessment one, two and three Complete two problems in which you prepare a variety of financial documents (income statement, statement of stockholders' equity, and balance sheet), practice using T-ac ...

The ryde and rowe inc had the following account balances as

The Ryde and Rowe Inc. had the following account balances as of January 1: Direct Materials Inventory $ 8,700 Work in Process Inventory 76,500 Finished Goods Inventory 53,000 Manufacturing Overhead 0 During the month of ...

In fiscal 2010 dell inc acquired perot systems for 3878

In Fiscal 2010, Dell Inc. acquired Perot Systems for $3,878 million in cash. Perot's net assets acquired hand the following fair values at the acquisition date. In Million Fair Value cash and cash equivalents $266 Accoun ...

Todays workforce is increasingly made up of part-time or

Today's workforce is increasingly made up of part-time or contingent employees. Is organizational culture important if the workforce is comprised of mostly temporaries

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro